Special Purpose Credit Programs (SPCPs) Update
On July 19, 2022, the Consumer Financial Protection Bureau (CFPB) has circled back to address the regulatory uncertainty regarding special purpose credit programs (SPCPs). Government sponsored credit subsidies for persons of age or an economically disadvantaged class of persons, and programs offering credit to a limited clientele such as credit union programs and educational loan programs, are examples of permitted SPCPs that consider a prohibited basis such as race, national origin, or sex. Congress has stated that it will protect such programs “specifically designed to prefer members of economically disadvantaged classes” to expand access to critical financial services, including mortgage lending.
The Bureau has recognized that there is a need for further guidance on how to develop SPCPs consistent with ECOA and Regulation B. According to the CFPB, creditors may offer or participate in SPCPs through:
Any credit assistance program authorized by federal or state law for the benefit of its members or an economically disadvantaged class of persons;
Any credit assistance program offered by a non-for-profit organization for the benefit of its members or an economically disadvantaged class of persons; or
Any SPCP offered by a for-profit organization, or in which such an organization participates to meet special social needs, if it meets certain standards prescribed in regulation by the Bureau.
Interested stakeholders can contact the CFPB with questions or requests for consultations about SPCPs. Information on how specific stakeholders can reach out is listed below.
Institutions under the CFPB’s supervisory jurisdiction should direct their questions and requests for meetings and consultations about SPCPs to their CFPB supervisory contact. Institutions outside the CFPB’s supervisory jurisdiction (like banks with less than $10 billion in assets) should contact their primary bank supervisor.
Consumer, community, civil rights, and nonprofit advocacy groups should direct their questions and requests for meetings and consultations regarding SPCPs to the CFPB’s Public Engagement and Community Liaison at PublicEngagement@cfpb.gov.
Bank and nonbank trade associations should direct their questions and requests for meetings and consultations regarding SPCPs to the CFPB’s Financial Institutions and Business Liaison at CFPB_FinancialInstitutions@cfpb.gov.
SPCP provisions of Regulation B and the CFPB’s guidance help explain how institutions can offer or participate in a SPCP. Questions about the CFPB’s regulations can be submitted by all stakeholders using this form. It is important to note that the CFPB and other federal agencies don’t determine whether a program qualifies for special purpose credit status. The Bureau suggests legal counsel and other compliance advice for official interpretations.